Monday, November 22, 2010

Does Hulu Plus hate its customers?

After spending an evening trying out their service, it sure seems that way. Hulu's competitor, Netflix, offers a wide variety of programming for instant download and it is, by contrast, commercial-free. One of the pleasant discoveries one makes after using Netflix instant for a while is how much better TV shows are when they are not interrupted by commercials, not even a break to fast-forward past commercials. Without commercial breaks, characters are more interesting and plots more compelling.

Like Netflix instant, Hulu Plus charges a monthly fee. Unlike Netflix, Hulu Plus has commercials. The commercials are frequent and un-skippable. There are commercial breaks of 30 second to a 1 minute or more duration at the beginning of each program, followed by commercial interruptions every 5 to 10 minutes, and a commercial at the end. That makes the interruptions on Hulu Plus more frequent than even broadcast TV.

Hulu Plus has more current TV programs than Netflix and some might argue that the commercials are necessary to pay for that content. In a pig's eye. Let's look at the numbers. According to this site, a 30-second commercial in a "medium-sized market" can be purchased for $0.005 per viewer. The Superbowl is famous for its expensive commercials. It is reported that "the average cost of a single 30-second TV spot during this game (seen by 90 million viewers) has reached US$2.7 million." That is $0.03 per viewer. In other words, Hulu Plus is ruining the value of their content with commercials and all they get for it is pennies per viewer. I'd be happy to have them raise the monthly fee by some pennies on the condition that I never have to endure another commercial break.

In addition to full episodes of current TV, Hulu Plus offers "clips." Many of the clips are brief cast interviews or other thinly disguised advertising for their TV shows. Try to play one and you will have to wait through some un-skippable commercial. In other words, Hulu Plus even interrupts its own ads with more ads.

For all the inconvenience of Hulu Plus, it charges more per month than Netflix. The advantage is the wider choice of current TV shows. However, Netflix has a wide variety of movies that Hulu lacks and they are available on demand, at no extra cost, and commercial-free.

Technology is making many industries obsolete. These include dead-tree newspapers, over-the-air radio, and the 30-minute network evening newscasts. Commercial television belongs in the same category. No one wants to watch commercials. With advances such as DVR and Netflix, no one has to. Hulu Plus is offering a state-of-the-art internet-based product but it is wedded to a 1950s era business model. Hulu Plus can try as hard as it wants to cling to the past but it can't stop the future.

RELATED: Praise for Roku player, which supports both Netflix and Hulu Plus, is here.

4 comments:

It's a good analysis but you left out the part where it freezes and buffers constantly when you stream on devices such as Roku. Netflix works perfectly on Roku. I'd keep Hulu even considering the commercials if it didn't crash my device every time I turn it on.

I HATE Hulu. The commercials are ridiculous because not only should a paying viewer not have to watch them at all, they're long! You have to sit through at least 3 commercials each time. Ridiculous.

Reason number 2 I hate Hulu: the shows they have are all shows you can watch for free on their network'd channel. For example, why pay to watch The Bachelor on Hulu when you can jump over to ABC.com and watch it for free? Nearly all the the shows they run can be watched for free on their actual website.